Judge Rules that Insurance Company does not have to Pay for TCPA Claims

In Zurich American Insurance Company et al v. Ocwen Financial Corporation et al, the defendant, a financial service company, requested that their insurance carrier provide defense and indemnification for the penalties associated with the defendant's alleged use of an ATDS to call consumers without the proper consent. Both Ocwen and their insurance provider filed motions for summary judgment, and the judge ruled in favor of the insurance company. After reviewing the insurance policy, the judge found, "no coverage for the underlying action." Read a copy of the decision here. Telemarketing businesses should know from long before their first day on the phones if their insurance policies have exclusions for TCPA violations. Consider working with a TCPA Lawyer, a telemarketing compliance counselor, or a telemarketing attorney that understand telemarketing rules like autodialer laws, robocall laws, telemarketing licenses, and telemarketing registrations.

FTC to Potentially Recommend Changes to CAN-SPAM 

On October 17th, the FTC announced in its regulatory agenda that agency staff will likely make recommendations to the agency's commissioners regarding the CAN-SPAM Act:

"CAN-SPAM Rule, 16 CFR 316. The Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM) regulates the transmission of all commercial electronic mail (email) messages. The FTC issued the CAN-SPAM Rule to implement the Act, as authorized by the statute. As part of its ongoing systematic review of its rules and guides, the Commission initiated a periodic review of the CAN-SPAM Rule on June 28, 2017. The public comment period closed on August 31, 2017. Commission staff anticipates sending a recommendation to the Commission by December 2018."

When the agency asked for comments in 2017, the request was specifically about the 10-day email opt-out window and the definition of transactional emails. Any changes would most likely be related to those two aspects of the CAN-SPAM act.

"Swipe Right to Sue"

A somewhat unnerving article was published in the Washington Post last week about a new app that will allow users to file lawsuits by "swiping right," similar to the functionality of a dating app. The app, named "DoNotPay," asks users a series of questions and allows them to "sue someone with their smartphones and claim awards from class-action lawsuits the same way they’d select a match on Tinder." Read the full article here. While it is far too early to see if this app will survive in the competitive technology world, the concept is concerning as it might further enable serial plaintiffs to file frivolous lawsuits. Contact a call center law firm if you are getting sued by a serial TCPA plaintiff.

FCC Takes Action Against Two Companies for Alleged Telemarketing Violations

Late last month, the FCC announced actions against two companies for allegedly violating Federal telemarketing regulations. First, the FCC proposed a $37.5 million forfeiture against Affordable Enterprises of Arizona, LLC for allegedly "unlawfully spoofing caller ID information to perpetrate a large-scale illegal telemarketing campaign." Second, the FCC proposed an $82 million forfeiture against Best Insurance Contracts, Inc. for allegedly "perpetrating an illegal spoofed robocall campaign involving more than 21 million robocalls during a three-month period from late 2016 through early 2017."

Read about these FCC Actions here and here. Learn about other FCC telemarketing laws, such as: Robocalling laws, autodialer laws, telemarketing licensing, telemarketing registrations, and telemarketing rules.

35 Attorneys General Submit Comments to FCC Regarding Robocalls

Last week, 35 state Attorneys General jointly submitted comments to the FCC imploring the agency to implement new rules to combat illegal robocalls. This was done as a response to the FCC's request for comments regarding methods of blocking illegal robocalls. One of the main themes of the letter is their support for a new "STIR/SHAKEN" method:

"Those concerned with battling illegal robocalls and illegal spoofing have been waiting for voice service providers to fully implement the STIR (Secure Telephone Identity Revisited) and SHAKEN (Secure Handling of Asserted information using toKENs) protocols – frameworks that service providers can utilize to authenticate legitimate calls and identify illegally spoofed calls. The State AGs see the industry is making progress concerning this initiative. On September 13, 2018, the Alliance for Telecommunications Industry Solutions (“ATIS”) filed a letter at this docket announcing the launch of the Secure Telephone Identity Governance Authority (“STI-GA”), which is designed to ensure the integrity of the STIR/SHAKEN protocols. With the launch of the Governance Authority, the remaining protocols can be established. Reports indicate STIR/SHAKEN will be operational by some carriers throughout next year."

Read the full letter here. To understand telemarketing compliance, contact a telemarketing lawyer, TCPA attorney, or telemarketing law firm.

FTC Settles Charges Against Alleged Perpetrator of Amazon Get-Rich-Quick Scheme

The FTC has settled charges against defendant Jeffrey A. Gomez for $63.5 million, most of which will be suspended when Gomez has surrendered $2.55 million in funds and assets to the FTC. The FTC alleged that Gomez and his businesses, "[Falsely] claimed their 'Amazing Wealth System' would enable consumers to create a profitable online business selling products on Amazon. Buyers, however, did not earn the advertised income. Most of them lost significant amounts of money, and many experienced problems with their Amazon stores, including suspension and losing their ability to sell on Amazon.com." Read the FTC's press release about this settlement here.

FCC Requests Comments on TCPA in Wake of Marks Ruling

The FCC's Consumer and Governmental Affairs Bureau is "[Seeking] further comment on how to interpret and apply the statutory definition of automatic telephone dialing system, including the phrase ‘using a random or sequential number generator,’ in light of the recent decision in Marks, as well as how that decision might bear on the analysis set forth in ACA International.” In Marks v. Crunch San Diego, LLC, the court held that the term ATDS includes any device with the capacity to store numbers in a list and dial them automatically. This is just one of many different rulings that have come out in the aftermath of the recent ACA v. FCC Court of Appeal’s decision that vacated the FCC’s previous interpretation of autodialers. Judges have been ruling on both sides of the aisle in the debate over what exactly constitutes an ATDS. Read the FCC’s press release and learn how to submit comments. Learn more about the definition of autodialer, telemarketing rules, telemarketing licenses, and telemarketing law firms. If you have any telemarketing compliance need, don't hesitate to call a telemarketing attorney or TCPA lawyer.

Representatives Show Support for Common Sense TCPA Reform

Last month, House Judiciary Committee Chairman Bob Goodlatte wrote a letter to FCC Chairman Ajit Pai showing his support for TCPA reform. Chairman Goodlatte wrote:
"I applaud the FCC's recent efforts to update its approach to the Telephone [Consumer] Protection Act ("TCPA"), as well as its efforts in cracking down on abusive and illegal robocalls. Furthermore, the D.C. Circuit's recent ruling in ACA International v. FCC...provides the Commission an opportunity to correct and clarify several areas of the TCPA and the 2015 TCPA Omnibus Declaratory Ruling, which, according to the Institute for Legal Reform, resulted in a 46% increase in TCPA case filings. Using this decision as a road map to bring common sense back to the TCPA, I recommend that the FCC clarify the term "automatic telephone dialing system" ("ATDS"), according to the plain language of the law and consistent with Congressional intent, to mean equipment must use a random or sequential number generator to store or produce numbers and dial those numbers without human intervention. Moreover, the FCC should find that only calls made using actual (not theoretical) ATDS capabilities are subject to the TCPA's restrictions."
Read Representative Goodlatte's full letter here.
Learn more about autodialer laws, robocall laws, telemarketing registrations, and telemarketing regulations.
Representative Michael C. Burgess, Chairman of the House Committee on Energy and Commerce, also recently wrote a letter to Chairman Pai in support of TCPA reform:
"It is imperative the FCC develop an updated TCPA framework that both protects consumers while maintaining the ability of good faith callers to contact consumers. This should be consistent with the Congressional direction in the 1991 TCPA and reflect emerging technologies that are helping consumers manage calls. The TCPA was not intended to be a barrier to normal communications between businesses and their customers. Under this approach, the FCC should find that only calls made using actual, not theoretical, ATDS capabilities are subject to the TCPA's restrictions."
Read Representative Burgess' full letter here.

Allen Legal's Feedback From Two Significant Recent Compliance Summits

Last week, representatives from the FTC visited Utah to present on consumer fraud and abuse in conjunction with the Utah Division of Consumer Protection.  The event was well-attended in Salt Lake City, but mostly by regulators and law enforcement.  Allen Legal staff were some of the only private compliance/defense attorneys present. The presentations were educational and reiterated that their investigations and enforcement remain complaint-based. Meaning, reducing or eliminating consumer complaints to regulatory agencies should be a top priority for marketers.  The online sale of nutraceuticals and telemarketing sales of home business opportunities both remain on the Division's short list of top complaints received.

Eric Allen from our firm also attended the PACE national compliance summit earlier this week in Washington DC, the presenters at which included both the FTC and FCC, among others.  Lois Greisman of the FTC emphasized that robocall enforcement will continue to be aggressive in 2019 and that companies cannot turn a blind eye to lead and call vendor violations.  Mark Stone of the FCC spoke about possible new forthcoming TCPA regulations, further redefining the definition of an ATDS and other important issues, especially in light of the recent decision in ACA Int'l which overturned their prior definitions. Contact a TCPA lawyer if you need help making sense of any of this information.


Learn more about telemarketing fines and robocall laws. If you need a telemarketing lawyer to help you with telemarketing compliance, call 801-930-1117.

Court Finds that Predictive Dialer is not an ATDS

Over the last few months, court rulings have been piling up on both sides of the aisle in the debate over what exactly constitutes an ATDS. Recently, and in stark contrast to the recent Marks v. Crunch Ninth Circuit decision, the court held in Fleming v. Associated Credit Servs. that a predictive dialer is not covered under the TCPA.

Below is an excerpt from the Judge's ruling:

"I hold that when the D.C. Circuit vacated the 2015 FCC Declaratory Ruling it also necessarily set aside the parts of the previous 2003 and 2008 FCC Orders that ruled that a predictive dialer was impermissible under the TCPA. . . The TCPA explicitly defines an ATDS as “equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” 47 U.S.C. § 227(a)(1). Does a system that dials numbers from a list that was not randomly or sequentially generated when the list was created qualify as an ATDS? With only the statutory text to guide me, I am convinced that the answer is no."
Learn more about autodialer laws and the definition of ATDS.

Uber Reaches $148 Million Settlement with State AGs in Data Breach Case

Popular ride-sharing service Uber has agreed to a $148 million settlement with the Attorneys General from all 50 states and the District of Columbia. A November 2016 hack of Uber's systems left important driver data compromised. Uber didn't make the breach public until November 2017, which violated laws that many states have in place that require businesses to inform their customers and/or employees as soon as possible in the event of a data breach. Read more here. Businesses should ensure that they have a proper data beach response plan in place.

Christine S. Wilson Sworn in as New FTC Commissioner

President Trump has named former Delta executive Christine S. Wilson as a new FTC Commissioner after former Commissioner Maureen K. Ohlhausen announced her departure last week.  Read the FTC's press release here.

Recreational Equipment Seller Settles FTC Charges for False "Made in USA" Claims

Four New York businesses that sell hockey pucks and other recreational equipment have agreed to settle an FTC lawsuit filed over allegations that the companies advertised their goods as being "Made in USA," when in reality they were made overseas. As part of the settlement, the defendants have been banned from "making unqualified U.S.-origin claims for their products, unless they can show that the products’ final assembly or processing -- and all significant processing -- take place in the United States, and that all or virtually all ingredients or components of the product are made and sourced in the United States." Read the FTC's press release about the settlements here.

FTC Shuts Down Another Alleged Business Coaching Scheme

The FTC filed a lawsuit against defendant Sean Brown for allegedly helping operate a business coaching scheme. Among the specific allegations, the FTC claimed that Brown and his company Digital Altitude, "falsely promised to provide individualized coaching from successful marketers, who in fact were just salespeople selling costlier membership levels." The FTC also alleges that the defendant misrepresented how much money individuals could make through the program. Businesses operating in spaces that the FTC and State AGs might consider to be "BizOps" should ensure that they reduce and resolve consumer complaints as quickly as possible. As a best practice, always refund customers who ask for their money back. Read more about this case here. Make sure you understand telemarketing rules and telemarketing regulations so that you can ensure 100 percent telemarketing compliance. Contact a telemarketing law firm or TCPA attorney if you need help with things like autodialer compliance,  telemarketing registrations, or robocall laws.

Man Imprisoned in Italy for Writing False TripAdvisor Reviews

A man in Italy has been put in jail by Italy's Postal and Communications Police for allegedly offering to write fake, positive reviews for businesses on TripAdvisor.com. Read more here. In the U.S., it is illegal to pay individuals to write reviews or testimonials without disclosing that the reviewer was compensated for doing so. If you violate that law, you could be sued by the FTC or a State Attorney General. Learn how to respond to an Attorney General in a telemarketing case.

Does a Spouse's Opt-in Count?

In Rodriguez v. Premier Bankcard, the plaintiff filed a TCPA lawsuit after a financial company made unsolicited calls to her cell phone. While the plaintiff had never opted-in to receive the calls, it turns out that her husband had included her number as a valid way to contact him when he was signing up for financial services from the defendant. The husband was the subscriber to the number, although the plaintiff was the primary user of the line. The Court held that a subscriber may give consent for a phone number to be called, even if the subscriber is not the primary user of the line. Read the full opinion here. Learn more about telemarketing compliance. What telemarketing fines are there? Contact a TCPA lawyer if you are facing a telemarketing lawsuit.

FTC Shuts Down Debt Collection Business

In a settlement with the FTC, a Georgia debt collection business has been banned from operating in the debt collection industry. The FTC alleged that the defendants used false claims and threatening tactics to get people to pay debts. Additionally, they allegedly tried to collect on debts that had already been paid and illegally contacted consumer's employers and other third parties. Most FTC actions are a result of consumer complaints. Ensure that reducing and resolving consumer complaints is one of your business' top priorities. Read the FTC's press release about this case here. Make sure you consult with a TCPA attorney to understand different telemarketing rules so that you can avoid trouble like this.

FCC to Seek Comments Regarding Implementation of Kari's Law

The FCC has released a Notice of Proposed Rulemaking regarding Kari's Law, which was signed into law by the president. In 2013, Kari Hunt was murdered by her husband in a motel room. Their daughter tried to call 911 on the motel phone, but the phone line didn't' have the capacity to make an emergency call without a pre-dialed digit. Kari's law will make it a requirement for phone systems in complex buildings like hotels, hospitals, schools, etc. to have the ability to dial 911 without any prefixes.  The FCC has released the notice and asked for comments in order to get feedback on the best way to implement the law. Read the Notice of Proposed Rulemaking here. Make sure you understand all telemarketing regulations.

Judge Dismisses Meritless TCPA Suit

In Johansen v. National Gas & Electric, the Judge has dismissed the case because the plaintiff gave the indication to the defendant that he was an interested customer before filing a lawsuit for alleged TCPA violations. Below is a key section of the Judge's analysis:

A call is excluded from the definition of a “telephone solicitation” if it is placed “to any person with that person’s prior express invitation or permission.” 47 U.S.C. § 227(a)(4). When an ETM representative proposed during the June 14 call that an enrollment specialist would call plaintiff, he responded, “Okay, great. Sounds good.” Doc. 36-4 at p. 3. In the calls which followed over the next several days, plaintiff never stated that he did not wish to receive any more calls. He kept agreeing to be called by an enrollment specialist and even attempted to call NG&E to complete the enrollment process when one of the calls got cut off.

Click here to read a copy of the Judge's opinion and order. Contact a TCPA attorney if you find yourself  in a situation like this. Learn more about cell phone telemarketing laws and do-not-call regulations.

Avaya Dialing System Held to be ATDS

In Heard v. Nationstar Mortgage LLC, the Court has held that the Avaya predictive dialer meets the definition of ATDS, even if the FCC's previous definitions of ATDS were overruled by the recent ACA v. FCC decision. The court zeroed in on the Avaya system's ability to "store" numbers, thus in part fitting the original statutory definition of an autodialer. Read the court's full opinion and order here. While this ruling is negative for the industry, there have been several positive rulings in recent months as well. The FCC will most likely be reevaluating its stance on autodialers in the upcoming months, as indicated in a recent letter from FCC Chairman Ajit Pai to several U.S. Senators. Although there have been court decisions on both sides of the issue, the upcoming FCC actions will be much more significant as the FCC is the agency charged with enforcing the TCPA and determining what an ATDS really is.  Learn more about the definition of ATDS, autodialer laws, robocall laws, and telemarketing compliance. Call a telemarketing lawyer if you have an urgent need that only a telemarketing law firm can help with.

FTC Publishes Tips on Spotting "Small Business Coaching Scams" 

Last week, the FTC published an article to help consumers spot alleged "Small Business Coaching Scams." Click here to read this article. Unfortunately, many legitimate businesses in the direct marketing industry are mistaken for business coaching scams. Make sure you understand what red flags consumers might see to come to this conclusion. For example, as stated in the FTC's article, "Some scammers sell bogus business coaching and internet promotion services. Using fake testimonials, videos, seminar presentations, and telemarketing calls, the scammers falsely promise amazing results and exclusive market research for people who pay their fees. They also may lure you in with low initial costs, only to ask for thousands of dollars later. In reality, the scammers leave budding entrepreneurs without the help they sought and with thousands of dollars of debt." To prevent consumers from reaching those conclusions about your business, make sure you only use real testimonials, only promise real results, and be honest about what costs are associated with your services. Reducing and resolving consumer complaints should be a priority for any direct marketing business. Learn how to respond to an Attorney General.